In the USA, people love to open indoor playgrounds. It’s like a dream come true for many people to create a safe, fun place for families and kids. But, turning that dream into reality can be tough and expensive.
The cost of opening an indoor playground can vary widely depending on the size of the space, the location, the equipment, and the permits you need. As you start to explore this idea, you’ll be shocked at how many different costs are involved. If you don’t plan well and understand what’s happening, unexpected costs and financial strain can potentially derail your business before you even get started.
The cost to start an indoor playground in the USA can vary widely depending on several factors such as the scale or complexity of play area equipment, location, staffing cost, marketing and advertising costs, and etc, but generally ranges from $50,000 to $500,000 or more.
I’ve been in this industry for more than 7 years. I’m going to tell you what you need to think about for your budget and planning. Let’s talk about some of the critical costs.
Indoor Playground Startup Cost Breakdown
Rental or Lease Cost
Your biggest, most consistent expenses is going to be your rent or lease cost for your indoor playground space. Commercial real estate costs vary significantly based on region. For example, leasing a large facility in New York City or Los Angeles will likely be much more expensive than in a small town or suburban area. On average, expect to pay $15 to $50 per square foot per year. So, if you have a 5,000 to 10,000 square-foot facility, that’s between $75,000 and $500,000 or more per year just in rent. You will also need to budget for utilities, security deposits, and potentially making renovations to the space to make it suitable for play equipment and family-friendly use.
Playground Equipment Cost
The heart of any indoor playground is the play equipment itself, and this is often the largest one-time cost for your business. It consists of four main parts: equipment cost, transportation cost, import tax and installation cost.
- Equipment Purchase
Usually the price is $140/m2 for heights below 3.2 meters and $200 for heights 4.5 meters, for example, if you want a 200 square meter playground, the price for two floors is about $28,000 and the price for three floors is about $40,000.
As we all know, indoor playgrounds are customized, and some play equipment is expensive, so this is a reference price. The final price could be up or down 30% or more.
- Shipping Rates
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As of recent trends, the price from shipping from Ningbo port to USA for a 40HQ container could range anywhere from $2,000 to $4,500.
- Import Tax
The HS code for our indoor playground is 950699000. To calculate import duties, use the formula: Total Import Duty = General Import Duty + Section 301 Tariffs + MPF (Merchandise Processing Fee)+ HMF.
General Duty Rate: For products under HS code 9506990000, the general duty rate is typically 4% of the total value of the imported goods. This is subject to change depending on the most recent U.S. tariff schedules.
Section 301 Tariffs, is also known as Trump Duty, Depending on the product’s country of origin (China), additional tariffs may apply due to the ongoing trade disputes between the U.S. and China. Many Chinese goods, including playground equipment, are subject to an additional 7.5% tariff under Section 301 of the U.S.
Merchandise Processing Fee (MPF): Typically 0.3464% of the cargo value, with a minimum of $29 and a maximum of $575.
Harbor Maintenance Fee (HMF): 0.125% of the cargo value for imports arriving by sea.
- Installation Fee
Installation Options | •Installation by our professional team (PAID SERVICE)
US$150/Person/day, Visa Cost, Round-trip Airfare, Food, Accommodation, and Daily Transportation. |
•Installation by yourselves
We’ll provide you with detailed installation guide, reference photos and video. At the same time, we will perform a trail installation before delivery.
View more: How to Install Indoor Playground? |
Other Startup Costs
In addition to rent and equipment, there are several other costs to consider when starting your indoor playground:
- Staffing
You will need to hire employees to run the day-to-day kids indoor playground operations. Depending on your business model, you may need staff for customer service, supervision, maintenance, cleaning, and administrative tasks.
Hiring staff is essential for operations, with entry-level positions typically paying between $10 and $20 per hour, while managerial roles can command higher wages.
- Marketing and Advertising
To attract customers, especially in the early stages of your business, investing in marketing and advertising is vital. A combination of digital marketing (social media, Google ads) and traditional marketing (flyers, local radio ads) can help get the word out. Budgeting $5,000 to $15,000 for your initial marketing campaign can be a good starting point.
- Insurance and Legal Fees
Because you are dealing with families and young children, you have to have liability insurance. You’ll need liability insurance, property insurance, and potentially workers’ compensation insurance if you have employees. And legal fees for business registration, contract review, and compliance with local regulations will also add to your costs.
Depending on the coverage you select and the size of your playground, indoor playground insurance cost can range from $1,000 to $5,000 annually, with larger facilities potentially facing higher premiums due to increased risk exposure.
What Are the Income Sources for Opening an Indoor Playground?
A well-thought-out indoor playground can create multiple streams of income which helps diversify your revenue and increase your profitability. Here are some of the main ways you will make money with your indoor playground business:
Admission Fees
Daily passes, group passes, and membership options are a staple revenue stream. Membership models can create a steady income flow.
Birthday Parties and Private Events
Another significant source of income is hosting birthday parties and private events. Many playgrounds offer different party packages, which can include decorations, food, and party favors.
Classes and Workshops
Many indoor play spaces expand their offerings by hosting educational classes and workshops. These can range from parent-child programs to art, music, or fitness classes.
Drop-In Childcare
Offering supervised drop-in childcare can be a valuable service, providing parents with a convenient option for temporary childcare.
Seasonal Camps
Running seasonal camps like summer camps or holiday-themed camps is a way to make money during school breaks.
Food and Beverage Sales
Having an on-site café or snack bar can also be profitable. You don’t have to offer a full-service restaurant. Just serve coffee, snacks, and light meals, especially if parents are looking for a place to relax while their kids play.
Merchandise Sales
You can also sell merchandise. It can be toys, apparel, or anything related to the playground. If you have a theme, create custom items that you can sell. Also, to encourage sales, you can do like Jumpin Junction Family Fun Center, to provide a discount that anytime a child comes in wearing their Jumpin' Junction t-shirt they will receive $2 off their admission that day!
Special Events and Themed Days
By hosting character meet and greets, holiday celebrations, or themed play sessions, you can help attract new customers and keep your regular clientele engaged.
How to Finance the Startup Costs?
If you’re freaking out about how much it’s going to cost to start an indoor playground, don’t worry. There are a lot of ways to finance your indoor playground business. Here are some options:
Small Business Loans
- SBA Loans: The U.S. Small Business Administration (SBA) offers a number of loan programs, such as the 7(a) Loan Program and the CDC/504 Loan Program, to provide long-term financing for small businesses. SBA loans generally have lower interest rates and more favorable terms than traditional bank loans.
- Bank Loans: Many banks offer small business loans specifically designed for entrepreneurs looking to start or expand a business. These loans may have higher interest rates than SBA loans, but they can still be a good option for financing an indoor playground startup.
Grants
Depending on where you are located, there may be local or state grants available for new businesses, especially businesses that benefit the community, like family entertainment centers.
Angel Investors
Angel investors are high-net-worth individuals who invest in startups in exchange for equity or convertible debt. They can provide not only funding but also valuable advice and connections to help grow your business.
Crowdfunding:
Platforms like Kickstarter or GoFundMe can help you raise money from the public, especially if you position your business as a community-focused endeavor.
What Permits Are Needed to Start an Indoor Playground Business in the USA?
To start an indoor playground business, you will typically need the following licenses and permits: General business license, Doing Business As (DBA) license, Employer Identification Number (EIN), Zoning Permit, Child care license, Health Department Permit, Fire Department Permit, Environmental Permits, etc. Be sure to contact your local and state government offices to find out the exact licensing requirements for your area because they differ. Some areas have additional regulations for businesses that cater to children.
Explore more at: What Licenses Do I Need To Start An Indoor Playground Business?
Common Challenges of Running an Indoor Playground
While running an indoor playground can be fun, it also comes with its own set of challenges. Knowing what these challenges are will help you prepare and strategize for long-term success:
Safety and Liability Concerns
Keeping children safe is the number one priority. Liability issues, accidents, and lawsuits can be a big risk, so make sure you have good insurance and follow all safety protocols.
High Initial Investment
As mentioned, the startup costs can be significant. You need to be careful about budgeting and financial planning to make sure you don’t run out of money before your business becomes profitable.
Maintenance and Upkeep
Playground equipment needs regular maintenance to stay safe and look good for your customers. This can mean ongoing costs and downtime for repairs.
Competition
Depending on where you’re located, you may have competition from other indoor playgrounds, arcades, or family entertainment options. It’s important to be different with unique offerings, themes, or services.
Seasonal Fluctuations
Indoor playgrounds often have seasonal highs and lows, with more traffic during the cold months and when kids are out of school. You need to plan for these ups and downs to manage cash flow.
Staffing Challenges
Finding and keeping reliable staff can be challenging, especially for positions where you need people to work with kids.
Adapting to Customer Needs
What people want can change, so staying ahead of trends and offering new experiences is key to staying in your indoor playground business.
Regulatory Compliance
Dealing with all the different local, state, and federal regulations for running a family business can be a headache. You need to stay on top of everything to avoid getting fined or shut down.
Conclusion
Starting an indoor playground in the USA is an exciting but complex business that requires careful planning and significant financial investment. From rent and equipment costs to marketing, staffing, and legal compliance, the costs can add up quickly. However, with diverse revenue streams and a solid business plan, your indoor playground can become a thriving community hub for families and children. By addressing common challenges and staying adaptable to customer needs, you can turn your vision into a successful business that provides joy and entertainment for years to come.
Still need help on how to start an indoor playground business? Contact Lebo Play and we will provide professional one-on-one service to help you realize your dream of opening an indoor playground for kids. Lebo Play is here to help you with everything from consulting to design to production and installation. We’re here for you. With the right market research, the right design for your indoor space, and the right indoor playground equipment, we can help you refine your indoor playground business plan. Your indoor playground will be a fun place for kids to grow up.
